1. A former president of the State of Israel, Moshe Katsav, is in jail. Former prime minister Ehud Olmert is also serving a sentence behind bars. Today, it emerged that Nochi Dankner, once the strongest figure in the Israeli economy, a prince of Israeli business courted by the country's leaders, is a criminal who will go to jail.
It's a sad day for Nochi Dankner, his friends and family. Precisely today, we should recall Dankner's contribution to the economy, to those in need, and to the general public. For example, at the time of the Second Lebanon War, he provided assistance from his own pocket and from his companies to residents of the north who were under fire.
Taking a wider view, today is an important day for the capital market, and for the justice system in Israel, which has one more demonstrated that all are equal before the law. People like to complain that in Israel the strong, those with connections and with the most expensive lawyers, will always win. Dankner and Itay Strum invested enormous resources in their campaign to prove their innocence. They were aided by the best lawyers and the most skillful media consultants, but all this failed to prevent their resounding conviction today.
2. For a few long moments Dankner sat with folded arms as though frozen in the front row of the large court room at the Tel Aviv District Court and heard Judge Khaled Kabub reject one by one the claims the defense had raised during the trial. With despondent eyes, Dankner saw how the main line of defense he had chosen came back at him like a boomerang.
According to this line of defense, not only did he not manipulate the shares of IDB Holding in February 2012, but he had no reason to do so, since the share offering was "a placement with friends" the outcome of which was known in advance. Kabub took the view that the way that Dankner treated the event as a matter among friends was what indicated the criminality of his conduct.
"Ironically, Dankner's use of the term 'a placement to friends' is no evidence of the absence of a criminal motive," Kabub said, adding, "Precisely Danker's attitude towards the situation as though it was something among friends when it was a matter of an offering by one of the strongest companies in the economy is what leads to the criminal nature of his actions."
Kabub was agitated, but decisive and pointed. "Dankner's explanations are utterly unconvincing… I do not accept the pretended innocence of the two accused," he said.
3. The parties to the trial the prosecution, Dankner, Strum and their defense counsel, were divided over three key questions that in the end decided the fate of the case. The first was whether the incriminating version of events presented by the state's witness, Adi Sheleg, was credible, or whether it was a false version that Sheleg made up only in order to extricate himself from the threat of falling foul of the law, after he realized in the course of his questioning by the Securities Authority that the Authority knew that he and his wife, Maya Sheleg, had profited to the tune of NIS 185,000 behind Strum's back.
A further important question related to the significance that should be attributed to the fact that Dankner referred his friends Yossi Williger, Ilan Ben-Dov, Zvi Barenboim, Gilad Tisona and Shimon Weintraub to Strum to buy shares in off-floor transactions from him. The prosecution claimed that Dankner thus financed Strum's illegal activity, and that his five friends were Strum's rescuers. Dankner, on the other hand, claimed that he referred his friends to Strum after he realized that they had no intention of buying the shares in the stock market offering.
The third key dispute was over the significance that ought to be attributed to Dankner's approach to senior managers at First International Bank of Israel (TASE: FTIN), Ilan Bazri and Nitza Zafrani, asking them to release credit for Strum, after his company's credit line had been blocked during trading.
On all three questions, Judge Kabub came down decisively on the side of the prosecution. Kabub found that Sheleg's main evidence was acceptable and credible. On Dankner's assistance to Strum in obtaining credit from First International Bank, Kabub found that it strengthened the prosecution's thesis that Dankner acted to raise funds for Strum in order to manipulate the share price. The judge cited Bazri who said in his testimony, "Tycoons did not approach me in order to give a recommendation about somebody. This was out of the ordinary, and because of that I remember the call."
On the third key question too, Kabub accepted the prosecution's stance in full. He found that referring Dankner's friends to Strum to buy shares off-floor made no business sense, and that it indicated the intention of the two accused to manipulate the share price. "Dankner sought to conceal the connection between him and his associates. I found no economic logic from Dankner's point of view in diverting investors from participating in the offering to purchasing off-floor through Strum. Dankner and Strum's versions were very strange," he found.
The convictions of Dankner and Strum were mainly based on circumstantial evidence, as generally happens in cases of this kind. But the circumstantial evidence as Kabub presented it today was as strong as direct evidence.
The verdict in the Dankner case puts the collapse of IDB in a new light. In the course of the trial, Dankner testified that he made two main mistakes in running the IDB group. The first was repeated purchases of shares in Credit Suisse. The second was the purchase of a hotel in Las Vegas for a huge sum together with Yitzhak Tshuva. Today, the court found that Dankner made another mistake: he was sunk so deep in his attempt to save his life's work that he acted in contravention of the law and defrauded the investors on the stock exchange,
Published by Globes [online], Israel business news - www.globes-online.com - on July 4, 2016
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